Daily Chart Art – May 19, 2011

EUR/USD: 1-hour

Ooh, could EUR/USD be saving its energy for a breakout? The pair has been consolidating inside an ascending triangle on the 1-hour chart and, from what I read in our Chart Patterns Cheat Sheet, a break to the top might be in the cards. But I wouldn’t bank on that just yet. Stochastic is nearly overbought, which means that euro bears could take over and push the pair below the bottom of the triangle. Watch out for a candle closing above the 1.4300 handle because that could count as an upside breakout!

USD/JPY: 1-hour

Feast your eyes on that rising channel on USD/JPY’s 1-hour chart! The pair has been moving inside that ascending range for almost a couple of weeks now and it seems to be poised to test the top again. The 82.00 major psychological level is in line with the top of the channel and could act as strong resistance, pushing USD/JPY back to the bottom. Stochastic is already in the overbought region, which means that this pair could turn on its heel really soon.

USD/CHF: Daily

Last but not least, let’s take a look at this longer-term channel on USD/CHF. The pair has been movin’ and groovin’ inside that falling channel on the daily chart, after finding resistance at the 50% Fibonacci retracement level. Judging from that bearish divergence I’m seeing, the pair could slide back to the bottom of the channel again. But before jumping in a short trade, I’d check out the 9 Rules for Trading Divergences first!

Before you get carried away with all these chart patterns, remember that technical analysis is only half the story.

To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis.

Lucky for us, Pip Diddy fills us in on what we need to know about fundamentals with his Daily Economic Roundup. Check him out, playas!

About Big Pippin

This is the true story of one man, picked to live in front of his computer screen and find ways to make money from trading money. See what happens when markets stop being polite and start being real! Using charts, I show how current currency price action is playing out and chart patterns forming.

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